Monday, 23 April 2012

Stocks to watch: MMC Corp, Gamuda, Destini Prima, building materials

KUALA LUMPUR (April 21): Stocks on Bursa Malaysia could trade range bound next week as investor sentiment remains edgy with the global economic outlook situation still remaining hazy at best, underpinned by the disappointing U.S. economic data last week stirring doubts about the strength of the recovery of the economic giant.

However, the local market could see some excitement over developments from the Klang Valley Mass Rapid Transit's (MRT) project, which could spur activities for building materials players as well.

Among the stocks that could be in focus are MMC Corp Bhd, GAMUDA BHD [] and Destini Prima Bhd.

Destini Prima Bhd, which was formerly known as SATANG HOLDINGS BHD []) has secured a two-year contract worth RM7.90 million from the Ministry of Defence Malaysia.

The company said on April 20 that its wholly owned unit Destini Prima Sdn Bhd (formerly known as Satang Jaya Sdn Bhd) had entered into a contract with MinDef to supply Anti-Tank Ammunition 40mm Rocket Propelled Grenade (RPG) for the arm for a period of two (2) years commencing from 30 April 2012 to 31 March 2013.

On thee outlook for the local market, MIDF Research head of equity Syed Muhammed Kifni said that the extended streak of net purchases of Bursa-listed shares by foreign investors that began in mid-February came to an end in the second week of April.

Subsequently, he said there was a waning strength of average foreign net purchases which conceivably underlies the difficulty of the FBM KLCI to sustain itself above the 1,600 points levels during the past weeks.

The ember of Euro debt crisis which recently re-flared in Spain may have offered the fundamental excuse for some investors to turn ‘risk-off’, he said.

“Hence the local market undercurrent is expected to remain positive and the benchmark index should again attempt to knock against the psychological 1,600 points ceiling in the coming days.

“Moreover the US Fed is anticipated to keep the key rates unchanged during its midweek meeting, thus we expect the FBM KLCI to continue trading range bound this week between its immediate technical support and resistance of 1,580 points and 1,610 points respectively,” he said.